The Vietnamese military-run Viettel Group has decided to withdraw from the African market of Kenya by abandoning a plan to acquire the stake in a local telecommunications company.
Accordingly, Viettel will quit its previous plan to buy up of 70 percent stake of the France-based telecommunications company Orange in Telkom Kenya Co. Kenya is the only market of the Orange in East Africa.
A few months ago, Viettel announced its plan to purchase 70 percent stake owned by Orange Telecom in Telkom Kenya. Telkom Kenya is a company jointly owned by the company and government of Kenya, in which the government holds 30 percent stake in the company.
PC World says Viettel want to consolidate operations in East Africa. Recently, Viettel has obtained the license in Tanzania, the second largest telecommunications market in East Africa, after Kenya.
Last week, Orange Telecom sold their company in Uganda to Africell, a move the French company took after the Kenyan government decided to sell its stake in Indian-owned yuMobile to Safaricom and Airtel, the two major competitors of Orange in the area.
Kenyan government said the decision of both Viettel and Orange will open up opportunities for other network operators to the market of Kenya.
However, PC World reported that Kenyan telecommunications market seemed disturbed.
"The withdrawal of Orange and yuMobile from the Kenyan market in less than a year has badly drawn a picture of the telecommunications market and regulatory environment in Kenya", Edith Mwale, analyst of African telecoms market of PC World said.
Safaricom currently dominates the market with more than 21 million subscribers, followed by Airtel with more than 5 million subscribers. Telkom Kenya has 2.6 million subscribers.
Intense competition in the telecommunications market forced yuMobile Kenya to stop doing business in Kenya, PC World reported. Like Orange Telecom, yuMobile has not achieved the profit target previously set.